Often the biggest stumbling block a distressed consumer faces is admitting that he needs help paying his bills. Programs are available to help, from utility payment plans to credit card debt consolidation to mortgage assistance. You must be able to document your hardship and express a commitment to making your debts whole, but once you do, you'll be amazed at how much better taking action feels.
Things You'll Need
- Contact information
- Hardship financial statement
Set aside quiet time and get your telephone. Gather every bill that's causing you a problem, and place each in order of importance. Generally, mortgage and other housing payments should be at the top, followed by utilities and other necessary expenditures, including auto loans. Credit cards should be at the bottom.
Call each creditor, beginning with the most urgent. Tell the customer service agent that you're having difficulty and you'd like to be put on a payment plan or discuss alternate arrangements. You can ask for an interest-rate reduction or a forbearance plan; forbearance allows you to miss payments for a period of time so you can get back on your feet. It doesn't eliminate the debt, however. You may be asked to provide documentation, such as a financial statement that proves your hardship.
Call the National Foundation for Credit Counseling if you still need help. The NFCC is a nonprofit consumer agency that helps consumers negotiate -- and sometimes settle -- unsecured debts. Mortgage and auto loans can't be part of an NFCC repayment plan, but you can get budget counseling.
Make payments to plans on time; this will greatly improve your credit score. If you cannot pay your bills, debt settlement or bankruptcy is an option; however, these choices are last resorts. Recovering from both requires discipline and time, but it can be done.